Gold Sold at US$4,288 per Ounce Outpaces Madsen's US$1,680 Reserve Price

• Madsen has Probable reserves of 478,000 ounces (oz) of gold at 8.16 grams per tonne (g/t).
• The reserve is estimated at a gold price of US$1,680 per ounce.
• The mineral resource behind it has an effective date of December 31, 2021.
• Madsen sold gold at an average of US$4,288 per ounce in the second quarter of 2026.
• An updated pre-feasibility study (PFS) combining Madsen and Rowan is proposed for the second half of 2026.

What Has Happened 

West Red Lake Gold Mines (TSXV: WRLG | OTCQX: WRLGF) carried the reserve and resource basis for its Madsen Mine in Ontario's Red Lake Mining District alongside drill results released on September 22, 2026. The mine holds Probable reserves of 478,000 ounces (oz) of gold grading 8.16 grams per tonne (g/t) within 1.87 million tonnes, estimated at a gold price of US$1,680 per ounce. The mineral resource, which includes those reserves, has an effective date of December 31, 2021.

In the second quarter of 2026, Madsen averaged a realized price of US$4,288 per ounce for gold. The September 22 results included 5.3 meters (m) at 176.04 g/t gold from the 904 Complex, including 1 m at 925.52 g/t.

How the Madsen Reserve Is Priced

Probable reserves are part of a Measured or Indicated resource shown to be economic in a mine plan at a stated metal price and cost base. Madsen's come from a pre-feasibility study (PFS) by SRK Consulting (Canada) Inc., dated April 30, 2026, with an effective date of January 7, 2025. It uses a gold price of US$1,680 per ounce and an exchange rate of 1.31 Canadian dollars per US dollar. 

Long-hole stopes, the excavated blocks from which ore is extracted, use a cut-off grade of 4.30 g/t, the minimum grade at which rock is counted as ore. That cut-off grade is based on an estimated operating cost of C$287.34 per tonne covering mining, plant, and general and administrative costs. Mechanized cut-and-fill stopes, in which ore is mined in horizontal slices and the opening is backfilled, use 5.28 g/t on C$354.90 per tonne. Incremental development material, the rock mined to open access to stopes, uses a cut-off grade of 1 g/t.

South Austin accounts for the largest share of the reserve, with 227,000 oz at 8.21 g/t, followed by Austin with 184,000 oz at 7.37 g/t. The 8 Zone adds 51,000 oz at 13.38 g/t and McVeigh 16,000 oz at 7.37 g/t. Madsen hosts an Indicated resource of 1.65 million ounces (Moz) at 7.4 g/t and an Inferred resource of 0.37 Moz at 6.3 g/t, inclusive of reserves. The resource is estimated at a 3.38 g/t cut-off grade and a gold price of US$1,800 per ounce. Its December 31, 2021 effective date excludes depletion from January 1, 2022, through the mine's closure on October 24, 2022, as it was deemed immaterial for the report.

Realized Gold Prices Against the Reserve Basis 

Madsen's realized gold price has stayed above the reserve gold price of US$1,680 per ounce in 2025 and in both reported quarters of 2026. The company sold 20,000 oz of gold in 2025 at an average price of US$3,650 per ounce, and 6,165 oz in the first quarter of 2026 at US$4,938 per ounce. Second-quarter sales of 8,260 oz averaged US$4,288 per ounce, 13% below the first quarter.

Second-quarter cash cost was US$2,000 per ounce sold. All-in sustaining cost fell 30% to US$3,284 per ounce from US$4,678 in the first quarter, bringing it within the full-year guidance range of US$2,800 to US$3,600 per ounce. Operating margin rose to 41% from 37%, and Madsen generated C$9.7 million of free cash flow after a negative first quarter.

President and Chief Executive Officer of West Red Lake Gold Mines, Shane Williams, measures the grade threshold against the mine's previous operator:

"Pure Gold needed to mine 6 or 7 grams. We need to mine 4 grams at the same sort of to make the same margin."

West Red Lake Gold Mines also says mines of this kind are very sensitive to the gold price, both up and down.

Cut-Off Grade & Mining Method

As of July 2026, management says everything mined at Madsen has come from long-hole open stoping, a mining method that blasts ore from long drill holes and collects it from below. The reserve already gives that method the lower of its 2 stope cut-off grades.

Williams links the gold price directly to the switch in mining method:

"Long hole is bigger tonnage, lower grade, cut and fill is higher grade but lower production, lower tonnage. So, gold price is also a factor, I would say: with the increasing gold price, obviously, cut-off grade can come down a lot more, which allows a lot more material, which allows us to switch to that long hole mining."

Mined grade in the second quarter of 2026 was 4.3 g/t, up 18% on the first quarter and below the 8.16 g/t reserve grade. As of July 2026, management says it aims to lift grade toward 6 to 8 g/t over the rest of the year as mining moves deeper into the ore body.

Drilling in 2026 & the Resource Base

The 2026 underground program is focused on defining near-term mining inventory and on growing the current mineral resource, a strategy the company anticipates continuing through 2026. The 904 Complex is an approximately 200-by-200-meter panel of intact gold mineralization that has not been historically mined, and full access to it is expected to enable larger stopes and greater efficiency in design and extraction.

Drill results from the 904 Complex were released on February 25, April 13, July 7, and September 22, 2026, all after the resource's December 31, 2021, effective date. Elsewhere in the mine, the North Austin Zone has mineralized domains defined over 0.5 kilometers of strike and remains open at depth and to the northeast.

On reconciliation, Williams answers with the drilling count behind the model:

"The model, all the drilling we've done over the last 2 years, it's been over 200,000 m of underground drilling. The model gold produced to what the model says we should, is reconciling very, very well."

The 904 Complex itself is in development for the first half of 2027.

Broader Context

Across 17 Canadian underground mines compared on gold-equivalent reserve grade, grades range from 1.60 g/t to 12.22 g/t, with Madsen at 8.16 g/t.

Madsen is in Red Lake, Ontario, a Tier One jurisdiction, and the company's long-term target is more than 150,000 oz per year across a multi-asset platform built around the Madsen mill. The Rowan deposit is the second asset in that plan, with development and a production ramp-up targeted for the first half of 2029.

What to Watch Next

An updated PFS combining Madsen and Rowan is proposed for the second half of 2026.

For 2027, the company is targeting the entry of the 904 Complex and the Fork satellite deposit into the production profile.

The nearer figure to track is 2026 production, guided at 35,000 to 45,000 oz with approximately 60% weighted to the second half.

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